US Government Shutdown Puts Brakes on IPO Momentum

Venture Global (LNG), Klarna (Buy Now, Pay Later), CoreWeave (AI-based cloud computing), Medline (medical supplies), PayPay (SoftBank-backed payment platform), Navan (corporate travel management)

A renewed surge in U.S. initial public offerings (IPOs) is now at risk of stalling, as the federal government shutdown, triggered by partisan gridlock in Congress, threatens to cripple the Securities and Exchange Commission (SEC) and halt critical IPO approvals, according to CNBC.

The shutdown, which began early Wednesday, has forced the SEC into a “skeleton operations” mode, retaining only essential staff and suspending non-critical functions, including IPO review and approval processes.

“The SEC is essentially paralyzed,” said Michael Ashley Schulman, Chief Investment Officer at Running Point Capital Advisors.

“That means no prospectus reviews, no comments, no approvals, a bureaucratic freeze at the worst possible moment, just as the IPO market was beginning to thaw after years of stagnation.”

Among the companies now caught in limbo are several high-profile names, including Once Upon a Farm, the organic baby food startup co-founded by actress Jennifer Garner, and Beta Technologies, an electric aircraft manufacturer, as well as Ethos Technologies, a life insurance innovator.

All three had filed or were preparing to launch IPOs, but now face indefinite delays. None responded to requests for comment on Tuesday.

This setback comes at a critical juncture: The fall IPO season was showing its strongest momentum since 2021, buoyed by strong investor demand, solid post-IPO performance, and a more favorable interest rate outlook.

According to Dealogic, U.S. IPOs had raised $52.94 billion across 263 deals as of September 29, the highest level in four years.

Major 2025 listings so far have included: Venture Global (LNG), Klarna (Buy Now, Pay Later), CoreWeave (AI-based cloud computing)

Additional IPOs expected later this year or early 2026 include Medline (medical supplies), PayPay (SoftBank-backed payment platform), and Navan (corporate travel management).

“We’re already seeing IPO timelines slide,” said Matt Kennedy, senior strategist at Renaissance Capital, which tracks IPO activity and runs IPO-focused ETFs.

“If the shutdown stretches beyond a week, we could see a full stop to new listings, cutting off the recovery we were anticipating.”

The timing couldn’t be worse. After nearly three years of IPO drought caused by high inflation, rate hikes, and market volatility, 2025 was shaping up to be a turnaround year for equity capital markets.

While U.S. government shutdowns are typically short-lived, the longest in history, 35 days during late 2018 and early 2019, brought IPO activity to a near standstill. In rare cases, companies navigated around the SEC by pre-pricing weeks in advance.

This time, the uncertainty is already affecting investment banks, exchanges, and IPO investors, with implications for underwriting fees, listing revenue, and capital access for fast-growing companies.

Still, some analysts remain cautiously optimistic. “If history is any guide, the market will bounce back,” said Lukas Mühlbauer, research analyst at IPOX.

“Strong investor demand, large fund inflows into IPO-focused products, and impressive post-listing performance could help the market rebound quickly once the shutdown ends.”